INTERNATIONAL FRANCHISE AGREEMENT

1.

DEFINITIONS

2.

GRANT OF FRANCHISE

2.1

Company grants to Franchisee the right to use the Krispy Kreme System for a term of fifteen (15) years (the “Term”) solely in connection with the conduct and operation of the STORE and subject to the terms and conditions of this Agreement.

2.2

During the Term, Franchisee will strictly and diligently perform its obligations under this Agreement and will continuously exert its best efforts to promote and enhance the development, operation and success of the STORE.

2.3

In addition to selling the Products, Franchisee will sell such other goods as Company may require from time to time in its sole discretion.

2.4

No exclusive territory, protection or other right in the contiguous space, area or market of the STORE is expressly or impliedly granted to Franchisee. Company reserves the right to operate or to grant others the right to operate Krispy Kreme Stores at any location other than the location of the STORE; to acquire and operate, or be acquired by, a business operating one or more businesses located at any location other than the location of the STORE; to develop, manufacture, distribute and/or sell, and license others to develop, market, distribute and/or sell, Products to customers located anywhere in the world through any channel of distribution; and to develop, manufacture, distribute and/or sell, and license others to develop, market, distribute and/or sell, Non-Core Products to customers located anywhere in the world through any channel of distribution.

3.

INITIAL FRANCHISE FEE AND ROYALTY

3.1

Concurrently with the execution of this Agreement and prior to the opening of the STORE, Franchisee agrees to pay to Company the Initial Franchise Fee specified in Schedule A.

3.2

On or before the Payment Day each week, Franchisee will (a) pay to Company the Royalty on the Gross Sales of the STORE for the preceding week and (b) report to

Company, in the form Company requires from time to time, the true and correct Gross Sales of the STORE for the immediately preceding week ending on Sunday.

4.

MANUALS AND SYSTEM STANDARDS

4.1

Solely for use in operating the STORE during the Term, Company will loan Franchisee one (1) copy of its Manuals. The copy of the Manuals that Company loans to Franchisee will be in English, however, Franchisee will, at its own expense, translate the Manuals into the language of the geographic area within which the STORE is located. Franchisee will keep its copy of the Manuals current and in a secure location at the STORE. If Franchisee’s copy of the Manuals is lost, destroyed or significantly damaged, Franchisee will obtain a replacement copy at Company’s then applicable charge. Franchisee may not at any time copy, duplicate, record or otherwise reproduce any part of the Manuals. Franchisee may not distribute any part of the Manuals and may not disclose any part of the Manuals to any person other than its employees who have a need to know the contents of the Manuals in order to perform their jobs.

4.2

During the Term, Franchisee will comply with all of the Manuals and the System Standards they contain in addition to all applicable laws, regulations, rules, by-laws, orders and ordinances in connection with its operation of the STORE. The Manuals are incorporated by reference into this Agreement. In the event of a dispute relating to the contents of the Manuals, the master copy of the Manuals maintained by Company at its principal office, is controlling. Company may at any time and from time to time change the Manuals to reflect changes in System Standards.

4.3

To determine whether Franchisee is in compliance with this Agreement and all System Standards, Company and/or its agents have the right at any time during regular business hours, and without prior notice to Franchisee, to: (a) inspect the STORE; (b) observe, photograph and videotape the operations of the STORE; (c) remove samples of any Products, materials or supplies for testing and analysis; (d) interview personnel of the STORE; (e) interview customers of the STORE and to require Franchisee to present to its customers any such evaluation forms periodically prescribed by Company and to participate in and/or request its customers to participate in any surveys performed by or on behalf of Company; and (f) inspect and copy any books, records and documents relating to the operation of the STORE.

5.

APPROVED PRODUCTS AND SUPPLIERS

5.1

Pursuant to a supply program established by Company, Company is the sole supplier to Franchisee of certain mixes, products, equipment and fixtures which consist of, but are not limited to, the items described in Exhibit B attached hereto. In the event Franchisee is in breach of this Agreement pursuant to Subsection 14.2 then, in addition to other remedies hereunder or under applicable law, Company may withhold delivery of such items to Franchisee until Franchisee cures such breach in accordance with Subsection 14.2.

5.2

Franchisee may purchase Non-Core Products only from Company and/or suppliers designated or approved by Company from time to time.

5.3

Franchisee will purchase supplies for the STORE only from Company or from local suppliers that Company from time to time designates or approves. Company will periodically provide Franchisee with a list of approved products and supplies and designated and approved suppliers. If Franchisee wishes to use any type or brand of product or supply item or wishes to purchase products or supplies from a supplier that is not currently designated or approved by Company, Franchisee will submit to Company specifications, photographs, samples and/or other information Company may request. Company has the right to inspect a proposed supplier’s facilities. Company will, within a reasonable time, determine whether such products, supplies or such supplier meets its specifications and standards and notify Franchisee whether it is authorized to use such product or supply item or purchase from such supplier. Company reserves the right to periodically re-inspect the facilities and products of any supplier it has accepted and to revoke its acceptance if the supplier does not continue to meet Company’s criteria.

6.

ADVERTISING AND PUBLIC RELATIONS

6.1

Company has established a Brand Fund (the “Brand Fund”) for the advertising, promotional, marketing and public relations programs and materials Company deems appropriate. Franchisee agrees to contribute to the Brand Fund an amount equal to one-quarter percent (.25%) of the STORE’s Gross Sales, payable in the same manner as the Royalty.

6.2

Company will direct all programs that the Brand Fund finances. The Brand Fund periodically will give Franchisee samples of advertising, marketing, and promotional formats and materials at no cost. At Franchisee’s request, Company will sell Franchisee multiple copies of these materials.

6.3

Company will account for the Brand Fund separately from its other funds and will not use the Brand Fund for any of its general operating expenses. However, Company may use the Brand Fund to pay the reasonable salaries and benefits of personnel who manage and administer the Brand Fund, and to pay other expenses that Company incurs in activities reasonably related to the management and administration of the Brand Fund.

6.4

The Brand Fund will not be Company’s asset. Although the Brand Fund is not a trust, Company will hold all Brand Fund contributions for the benefit of the contributors and use contributions only for the purposes described in Subsections 6.1 through 6.8. Company does not have any fiduciary obligation for administering the Brand Fund or for any other reason. The Brand Fund may spend in any fiscal year more or less than the total Brand Fund contributions in that year, borrow from Company or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. Company will use all interest earned on Brand Fund contributions to pay costs before using the Brand Fund’s other assets.

6.5

Company will prepare an annual, unaudited statement of Brand Fund collections and expenses and give Franchisee the statement upon written request. Company may have the Brand Fund audited annually, at the Brand Fund’s expense, by an independent certified public accountant. Company may incorporate the Brand Fund or operate it through a separate entity whenever Company deems appropriate. The successor entity will have all of the rights and duties specified in Subsections 6.1 through 6.8.

6.6

Company cannot ensure that Brand Fund expenditures in or affecting any geographic area are proportionate or equivalent to Brand Fund contributions by contributors operating in that geographic area or that any contributor benefits directly or in proportion to its Brand Fund contribution.

6.7

Company has the right, but no obligation, to use collection agents and institute legal proceedings to collect Brand Fund contributions at the Brand Fund’s expense. Company may also forgive, waive, settle and compromise any and all claims by or against the Brand Fund. Except as expressly provided in Subsections 6.1 through 6.8, Company assumes no direct or indirect liability or obligation to Franchisee for collecting amounts due to, maintaining, directing or administering the Brand Fund.

6.8

Company may at any time defer or reduce the Brand Fund contributions of one or more franchisees and, upon thirty (30) days’ prior written notice to Franchisee, reduce or suspend Brand Fund contributions and operations for one or more periods of any length and terminate (and, if terminated, reinstate) the Brand Fund. If Company terminates the Brand Fund, it will distribute all unspent monies to its franchisees, and to Company and its affiliates, in proportion to their, and its, respective Brand Fund contributions during the preceding twelve (12) month period.

6.9

Franchisee will not execute or conduct any advertising or promotional activity in relation to the STORE or the Krispy Kreme System without Company’s prior written approval.

6.9

Franchisee will be responsible for conducting, with Company’s guidance, the Grand Opening Marketing Program during the period commencing thirty (30) days before and ending ninety (90) days after the opening of the STORE. The Grand Opening Marketing Program will utilize the public relations and advertising programs and media and advertising and promotional materials that Company has developed or approved.

6.9

During each twelve (12) month period of the Term, Franchisee will spend for advertising and promotion of the STORE not less than three percent (3%) of the STORE’s Gross Sales. Company will have the right to review Franchisee’s books and records from time to time to determine Franchisee’s expenditures for such advertising and promotion.

6.10

Before Franchisee uses any advertising, promotional or marketing materials which Company has not prepared or previously approved, Franchisee must send samples of all such materials to Company for approval. If Franchisee does not receive Company’s

written approval within thirty (30) days after Company receives the materials, they are deemed approved. Franchisee may not use any advertising, promotional, or marketing materials that Company has disapproved.

6.11

Franchisee agrees that any advertising, promotion and marketing it conducts will be completely clear and factual and not misleading and conform to the highest standards of ethical marketing and the promotion policies that Company prescribes from time to time.

6.12

Company may modify or add to its Website to include information relating to the STORE. Company will control Website traffic and registration of additional domain names.

7.

TRAINING AND GUIDANCE

7.1

Before the STORE begins operating, Company will furnish, at no additional cost to Franchisee, a training program covering the operation of a Krispy Kreme Store for up to two (2) managers. Such training program will be conducted at Company’s designated training facility and/or at an operating Krispy Kreme Store. The STORE manager(s) must complete the training to Company’s satisfaction. Company will furnish, again at no additional cost to Franchisee, and subject to the schedules of the training program in effect from time to time, the same training program to one (1) additional manager of the STORE per year that Franchisee hires after the STORE opens for business. Company may charge reasonable fees for the training of any managers thereafter. Franchisee will be responsible for the wages, salaries, travel and living expenses that any STORE manager(s) incur in connection with the training.

7.2

A management training program and/or modified training programs will be available at no charge to such members of Franchisee’s senior management as are selected by Company, which members will be required to complete Company’s management training program and/or modified training programs to Company’s satisfaction. Franchisee will be responsible for all travel and living expenses and compensation of its personnel who attend a training program. If any such member is unable to satisfactorily complete the training program, Franchisee will promptly designate a replacement for such member, who will satisfactorily complete the training program. Any subsequent training performed by Company will be at times and places designated by Company and at per diem charges established by Company from time to time.

7.3

Company may require previously trained and experienced STORE managers to attend up to one (1) refresher training course per year at such times and locations that Company designates.

7.4

Company will provide guidance and assistance to Franchisee from time to time and in the manner Company deems appropriate, regarding the operation of the STORE. Furthermore, if Franchisee requests or Company requires additional or special training for Franchisee’s employees, all of the expenses incurred by Company in connection with

such training, including, without limitation, per diem charges for travel and living expenses for Company’s personnel, will be Franchisee’s responsibility.

8.

MARKS AND COPYRIGHTED WORKS

8.1

Franchisee acknowledges and agrees that the Marks and Copyrighted Works are owned by and are the valuable property of Company and/or HDN. Franchisee will acquire no right, interest or benefit in or to the Marks or Copyrighted Works other than the limited rights of use granted under this Agreement. If Company authorizes Franchisee to prepare any new works, translations or derivative works from the Copyrighted Works, Franchisee hereby agrees that such new works, translations or derivative works will be the property of Company, and Franchisee hereby assigns, throughout the world, and will cause all authors or owners thereof likewise to assign, throughout the world, all right, title and interest in and to such new works, translations and derivative works to Company. Franchisee further covenants that any such new materials, new works, translations or derivative works created by Franchisee or by any third party engaged by Franchisee are original to Franchisee or to such third party and do not violate the rights of any other person or entity; this covenant regarding originality shall not extend to any materials supplied by Company to Franchisee, but does apply to all materials Franchisee or its third party contractors may add thereto. Franchisee hereby waives all “moral rights” it may have in such new materials, new works, translations or derivative works, and shall cause its third party contractors to waive all “moral rights” they may have in such new materials, new works, translations or derivative works. Franchisee will submit all such materials, reproduction or other new works, translations or derivative works to Company for approval prior to use. All usage of the Marks and Copyrighted Works by Franchisee and any goodwill established thereby will inure to the exclusive benefit of Company and/or HDN. Franchisee agrees that it will in no way represent that it is the owner of, or has any right, title or interest in the Marks or Copyrighted Works other than the rights granted under this Agreement. Any unauthorized use of the Marks or Copyrighted Works by Franchisee will be a breach of this Agreement and will constitute an infringement of the rights of Company and HDN in and to the Marks and/or in the Copyrighted Works. Upon the expiration or termination of this Agreement for any reason, Franchisee will have no claim whatsoever against Company or HDN for compensation for any goodwill associated with the Marks and Copyrighted Works.

8.2

Franchisee will use the Marks and Copyrighted Works only in such form and manner as is expressly authorized by Company or HDN from time to time, and Franchisee will follow Company or HDN’s instructions regarding proper usage of the Marks in all respects. Franchisee will ensure that all Copyrighted Works used hereunder bear an appropriate copyright notice under the Universal Copyright Convention or other copyright laws as prescribed by Company or HDN. Company or HDN may, by notice to Franchisee, at any time change or withdraw any of the Marks and Copyrighted Works or designate new Marks or works in which copyright subsists, and Franchisee will implement such changes, withdrawals and additions within the period specified in the notice and at Franchisee’s expense.

8.3

Franchisee will not apply for or assist any third party in applying for, or seek to apply for, registration of any of the Marks, or any mark which is substantially identical or confusingly similar to the Marks or any of the Copyrighted Works, or Copyrighted Works or any portion thereof or Company’s or HDN’s proprietary rights in the Confidential Information anywhere in the world.

8.4

Franchisee will do nothing to prejudice, damage or contest the validity of the Marks (and registration thereof), the Copyrighted Works, the goodwill associated with the Marks and the Copyrighted Works, and Company and HDN’s proprietary rights in the Confidential Information. Franchisee will cooperate fully with Company in the protection and defense of the Marks and the Copyrighted Works. Franchisee will immediately notify Company of any apparent infringement of or challenge to Franchisee’s use of any Mark or Copyrighted Work, or claim by any person of any rights in any Mark or a confusingly or deceptively similar trademark, service mark or other item of intellectual property or Copyrighted Work. Franchisee will not communicate with any person other than its counsel and local governmental authorities (if required), Company and/or its counsel with respect to any such infringement, challenge or claim. Company has sole discretion to take such action as it deems appropriate in connection with any such infringement, challenge or claim of rights, and the right to control exclusively any settlement or legal processing arising out of any such infringement, challenge or claim or otherwise relating to any Mark or Copyrighted Work. Any award, or portion of an award, recovered by Company and/or HDN in any such action or proceeding shall belong solely to Company and/or HDN.

9.

CONFIDENTIALITY AND EXCLUSIVE RELATIONSHIP

9.1

Franchisee will at all times during and after the Term keep confidential and not disclose to any person, other than with Company’s prior written approval, the terms of this Agreement and any related agreements, the System Standards, the Manuals, all other materials containing or referring to the Marks or Copyrighted Works and all other information concerning the Krispy Kreme System, the Marks or Copyrighted Works, the Products or Non-Core Products, or Company’s business and affairs which may come to Franchisee by any means during the Term. Company may disclose the Manuals to Franchisee by any means during the Term. Franchisee may disclose the Manuals to Franchisee’s employees, on a need-to-know basis, only for the purposes of operating the STORE and provided that Franchisee at all times uses best endeavors to ensure that Franchisee’s employees retain in confidence the Manuals and any other materials or information disclosed to them with Company’s approval. This obligation of confidentiality does not apply in respect of information in the public domain or previously known to Franchisee otherwise than by breach of any obligation of confidentiality, or disclosure required by law or an order of any court or tribunal. Franchisee acknowledges that any breach of this obligation of confidentiality may cause substantial irreparable damage to Company and that, in addition to damages or other monetary compensation, injunctive or other equitable or immediate relief may be appropriate.

9.2

Franchisee acknowledges that Company has granted Franchises to Franchisee in consideration of and reliance upon Franchisee’s agreement that it and its Owners will deal exclusively with Company. Franchisee therefore agrees that, during the Term, neither Franchisee nor any of its Owners will, anywhere in the world: (a) have any direct or indirect Ownership Interest in any Competitive Business (this restriction is not applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on a public stock market that represent less than three percent (3%) of the number of shares of that class of securities issued and outstanding); (b) perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for any Competitive Business; or (c) recruit or hire any person who is Company’s employee or the employee of any Krispy Kreme Store or who has been Company’s employee or the employee of any Krispy Kreme Store within the past six (6) months without obtaining prior written permission from Company or that person’s employer. Franchisee acknowledges and agrees that the failure of any person or entity restricted by this Section to comply with this Section will constitute a breach of this Agreement by Franchisee.

10.

ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS

10.1

Franchisee will, at its expense, retain all records relating to the development and operation of the STORE. Franchisee will furnish to Company via the medium Company prescribes from time to time, in a form consistent with its then-current accounting practices and procedures: (a) weekly reports of the STORE’s sales, cost of goods sold, labor expense and number of transactions by 12:00 noon (Eastern Standard Time) on Tuesday of each week for the preceding week; (b) within thirty (30) days after the end of each month, an operating income statement of Franchisee for such month and fiscal year to date, prepared in accordance with generally accepted accounting principles consistently applied in the geographic area within which the STORE is located; (c) within forty-five (45) days after the end of each fiscal quarter, a balance sheet and income statement of Franchisee for such quarter and fiscal year to date, prepared in accordance with generally accepted accounting principles consistently applied in the geographic area within which the STORE is located; (d) within one hundred twenty days (120) days after the end of Franchisee’s fiscal year, an income statement for the STORE for such fiscal year (reflecting all year-end adjustments), and a statement of cash flow of the STORE, prepared in accordance with generally accepted accounting principles consistently applied in the geographic area within which the STORE is located; and (e) upon request by Company, such other data, reports, information and supporting records as Company may from time to time prescribe.

10.2

Franchisee agrees to maintain and to furnish to Company, upon request, complete copies of all withholding, income, sales, value added, use and service tax returns filed by Franchisee reflecting activities of the STORE. Company has the right to (a) disclose data derived from such reports without identifying Franchisee or the location of the STORE; (b) require Franchisee to have audited financial statements prepared on an annual basis; and (c) to access all cash registers/computer terminals and Franchisee’s computer system and retrieve all information relating to the STORE, as often as it deems appropriate.

Franchisee will take such action as may be necessary to provide such access to Company. Furthermore, Franchisee will immediately report to Company any events or developments which may have a significant or material adverse impact on the operation of the STORE, Franchisee’s performance under this Agreement, or the goodwill associated with the Marks and Krispy Kreme Stores. Franchisee will sign and verify as correct each report and financial statement submitted by Franchisee in the manner prescribed by Company.

10.3

Company will comply with all applicable consumer privacy and data protection laws and regulations and with any consumer privacy and data protection policies of Company in effect from time to time, including without limitation all laws, regulations and policies relating to any transfer of personal information by Franchisee to Company. Franchisee acknowledges and agrees that it is solely responsible for determining whether its data processing policies relating to international transfers of personal information are in compliance with all applicable laws and regulations. Franchisee will immediately notify Company if Franchisee discovers that its or Company’s consumer privacy and data protection policies applicable to Franchisee are not in conformity with applicable laws and regulations, including without limitation all laws and regulations relating to any transfer of personal information by Franchisee to Company.

10.4

Company has the right to audit at any time during regular business hours, and without prior notice to Franchisee, to inspect and audit, or cause to be inspected and audited, the business, financial and tax records of the STORE and Franchisee. Franchisee will fully cooperate and cause its employees and agents to fully cooperate with representatives of Company and independent accountants hired by Company to conduct any such inspection or audit. Company’s right to audit includes, without limitation, the right to access Franchisee’s computer system. In the event any such inspection or audit reveals an understatement of the Gross Sales of the STORE, Franchisee will pay to Company, within fifteen (15) days after receipt of the inspection or audit report, the Royalty payments due on the amount of such understatement, plus interest (at the rate and on the terms provided in this Agreement) from the date originally due until the date of payment. Further, in the event such inspection or audit is made necessary by the failure of Franchisee to timely furnish any reports or supporting records required to be submitted under this Agreement or if an understatement of Gross Sales for the period of any audit is determined by any such audit or inspection to be greater than two percent (2%), Franchisee will reimburse Company for the cost of such inspection or audit, including, without limitation, legal fees, accountants’ fees and the travel expenses, room and board and per diem charges for employees of Company. The foregoing remedies are in addition to all other remedies and rights of Company hereunder or under applicable law.

11.

FRANCHISEE’S OBLIGATIONS

11.1

Franchisee will disclose to Company all ideas, concepts, methods, techniques and products, including without limitation any developments or improvements to existing ideas, concepts, methods, techniques and products, conceived or developed by Franchisee, its Owners, employees and agents relating to the development and operation

of Krispy Kreme Stores. Franchisee hereby grants to Company and agrees to procure from its Owners, employees and agents who have access to know-how relating to the development and operation of Krispy Kreme Stores, a perpetual, exclusive, royalty-free and worldwide right to use such ideas, concepts, methods, techniques and products in all food service businesses operated by Company, its Affiliates, developers and franchisees. Company has no obligation to pay Franchisee or any other person with respect to any such ideas, concept, method, technique or product. Franchisee will not use or allow any other person to use any such concept, method, technique or product without obtaining Company’s prior written approval.

11.2

Franchisee agrees that the STORE will be under direct, on-premises management by a trained Managing Director or General Manager (as designated in the Development Agreement) or one of Franchisee’s store managers, all of whom have completed training to Company’s satisfaction.

12.

PAYMENTS BY FRANCHISEE

12.1

Franchisee will pay all amounts due to Company on each Payment Day pursuant to this Agreement:

12.2

Without limiting Company’s right to terminate this Agreement pursuant to Section 14, all amounts which Franchisee owes to Company or its Affiliates under this Agreement or any related agreement will bear interest after due date at a rate specified in Schedule A.